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Corporate Buybacks Surpass $200 Billion In Q3, Hit All Time High

December 18th, 2018 | by Richard Paul
Corporate Buybacks Surpass $200 Billion In Q3, Hit All Time High
Business and Finance
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Corporate Buybacks Surpass $200 Billion In Q3, Hit All Time High

As US equity indexes soared to all-time highs over the summer, traders were left in slackjawed wonder by stocks’ resilience to every market negative, including a burgeoning trade war with China and outflows from nearly every ownership category.

At the time, analysts attributed this behavior to the robustness of the Trump economy and the profit boost of the Trump tax cuts. But we dared to posit another explanation that somehow slipped below Wall Street’s radar: Citing research from Goldman and BofA, we pointed out that after notching a quarterly record in Q2, the pace of corporate buybacks accelerated in Q3. And while investors celebrated Apple’s stunning market milestone, Goldman’s David Kostin argued that markets were asking the wrong $1 trillion question.

Four months later, the boost from Trump’s tax cuts is fading, stocks can’t keep a bid and S&P Dow Jones Indices just confirmed something we had long suspected (something that was driven home once again by Oracle’s earnings report last night): Namely, that the most important factor in US markets this year has been the corporate bid. That’s because, after clinching a quarterly records in Q1 and Q2, members of the S&P 500 went on to set another quarterly record for share repurchases in the Q3.

To read the entire article click here at zerohedge.com

 

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